insurance
So now that I have renter’s insurance, I have as much insurance as I’m going to need, which I realize now I haven’t seen in any articles talking about emergency funds (outside of the admonishment to have enough to pay deductibles). As I mentioned before, you can’t expect a $1,000 emergency fund to help if your car is destroyed or your stuff goes up in smoke. I have life insurance, long and short term disability insurance, auto insurance for accidents and theft, various warranties on the condition and parts of my car, medical, vision, dental, and now renter’s insurance. My $1,000 is enough to cover any deductible I have, plus another $500 cushion just in case (none of my deductibles for anything are higher than $500). If you have an emergency, chances are the deductible won’t be the only expense you have. That’s why it’s important to keep your emergency fund growing, even if it’s not your biggest priority. Every little bit helps. $1,000 was my target for the short-term, but it’s not my end goal.
I know what it’s like to not have health insurance. I spent about two and a half years without it in the past five years, and every illness threatened to put me in a deeper financial hole than I’m in now. So many people have jacked up credit because of medical bills, and I was just hoping and praying that I wouldn’t be one of them. I was blessed with good health and no accidents, so I didn’t incur that problem. And now, I’m hoping my insurers will be faithful if something happens.
I have a cousin whose parked car was hit by a drunk teenager in the middle of the night, right in front of his house. The car was a total loss. Neither his nor the kid’s insurer wanted to pay for another car. And he was stuck with the remainder of the loan for a car that no longer exists. If he’d had total loss insurance, this could have been avoided. I have another cousin whose credit is destroyed over $20,000 in medical bills incurred for an ambulance ride and emergency care when she drowned in a lake a few summers ago with no medical insurance. This is the kind of stuff that could derail my efforts to get out of debt.
That’s why I’m insured to the hilt. (And why I really intend to become a stronger swimmer!)
